Vietnam’s telecommunications market heats up

Wednesday, 2019-07-24 11:25:01
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The total number of mobile subscribers in the first six months of 2019 reached 134.5 million, up 12.3% year on year.
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NDO - The domestic telecommunications market returned to growth in the first half of 2019 after a long period of saturation and is expected to become more vibrant in the time ahead as carriers are racing to test and roll out 5G services.

Positive growth

A report by the Ministry of Information and Telecommunications (MIC) showed that the total number of mobile subscribers in the first six months of 2019 reached 134.5 million, up 12.3% over the same period of last year. Such a high figure indicates a recovery in the market after a long period of sluggishness.

Analysts said that such a positive result was due to several major policy changes taken by the MIC, first of which is the mobile number portability service introduced in late 2018. In the early days, carriers set up barriers to prevent their subscribers from switching to another provider, but the situation has now been reined in thanks to the MIC’s bold regulation. The last six months saw more than 550,000 mobile users succeed in switching their carriers.

In another move, the MIC licensed 5G trials to three major carriers, giving way to a technological race which is expected to become fierce in the months ahead. Military-run Viettel has announced the successful testing of the fifth-generation wireless technology in Hanoi and is expanding trials in Ho Chi Minh City. VNPT Vinaphone and Mobifone are also gearing up to test the technology in major Vietnamese cities.

The MIC has also worked with the State Bank of Vietnam to formulate a plan that allows mobile carriers to pilot mobile payment, a move lauded as a breakthrough to help reduce cash payments, make the national financial market more transparent, and open new growth opportunities for mobile carriers.

Amid growing competitive pressure and with new opportunities opening ahead, carriers have been forced to enhance their service quality and develop new service plans that are cheaper and have higher bandwidth in order lure customers. Viettel kicked off the race by doubling the bandwidth while keeping the prices unchanged for all broadband internet users.

A few days later, VNPT followed suit with the same policy while other internet service providers are also seeking measures to cope with their competitors’ moves.

New trends

Today consumers have increasingly higher demands for using integrated services, that is why carriers are focusing on incorporating many services and contents into their product packages so as to win over customers. Globally, more than 100 carriers have integrated music applications into their products and this integration will apparently be a long-term trend in the world.

It has also been forecast that the number of people using an integrated plan with four services or more will increase to 46 million in 2019. Revenues from online video are projected to rise to US$48 billion in 2023 with annual growth rate averaging at 18%.

During the integration of services, the personalisation of service plans is becoming the prevailing trend, meaning that carriers will sell what their customers’ need, where artificial intelligence will analyse customer demand to provide different packages tailored to specific customer groups.

A study suggests that 76% of customers expect service/product providers to understand their demands and wishes. On the other hand, 56% of customers proactively look for and buy from companies that offer good products while 66% like companies that impress with new products and services. It is also notable that 84% wish to be treated as special rather than like everyone else. Personalisation is obviously becoming more important to selling products and enhancing customer experience.

In Vietnam up to 92% of internet users view at least one item of online content per week. But the majority of telecommunications products offered on the market are the same for all demands, differentiated only by speed, capacity, prices or with or without TV services. Therefore, service integration and personalisation will be a breakthrough solution for telecommunications firms.

The pioneer in this area is VNPT with the Home package that integrates internet, TV and mobile services for home use and the Mobile Data package for customers using data-intensive apps.

VNPT Vinaphone Deputy General Director Nguyen Truong Giang said personalisation will be present in most of its new products and services in the times ahead, adding that new plans will differ based on customers’ application and content preferences.